NEW YORK, Aug. 22, 2008 (GLOBE NEWSWIRE) -- Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) (the "Pomerantz Firm") filed a class action complaint in the United States District Court, Northern District of Georgia, against CompuCredit Corporation ("CompuCredit" or the "Company") (Nasdaq:CCRT) and certain of its officers on behalf of purchasers of the common stock of the Company between November 6, 2006 and June 9, 2008 (the "Class Period"). The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5.
If you purchased or acquired the securities of CompuCredit during the Class Period, you may request that the Court appoint you as lead plaintiff. Not later that sixty (60) days after the date on which the first notice was published, any member of the purported class may move the Court to serve as lead plaintiff of the purported class. The date on which the first notice was published was July 14, 2008.
If you wish to review a copy of the Complaint, to discuss this action, or have any questions, please contact Teresa L. Webb (tlwebb@pomlaw.com) of the Pomerantz Firm at 888.476.6529 (or 888.4-POMLAW), toll free. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
CompuCredit markets credit cards to underserved or "un-banked" consumers and also engages in debt collection services. It is alleged that during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and financial results, including: (a) touted the Company's consumer friendly marketing practices and the growth of its credit card business; (b) portrayed the Company's marketing and collection practices as being fully compliant with the law; and (c) to the extent they disclosed any investigations by regulators, they assured the public that the Company was addressing the regulators' concerns and that the outcome would not be material to the Company's financial condition.
According to the Complaint, the Company's true state of affairs began to be revealed when on June 10, 2008, The Wall Street Journal reported that, "Federal regulators are expected to seek more than $100 million in fines and restitution Tuesday against CompuCredit Corp. and affiliate banks related to credit-card-marketing and debt-collection practices, people familiar with the matter said." The same day, the FDIC and FTC announced enforcement actions against the Company and affiliated banks seeking restitution to consumers in the form of credits for certain fees and charges of over $200 million. The FDIC detailed egregious misconduct. For example, the Company's solicitations to consumers created the impression they were getting a card with a $300 credit limit. However, CompuCredit concealed that consumers would be immediately charged with upfront fees of as much as $185, so that the credit would be reduced to $115 before a consumer ever used the card.
The market was shocked by the previously undisclosed level of exposure from the federal investigation. The potential fines could wipe out the Company's "managed" earnings as reported throughout the Class Period. On this news, CompuCredit's stock dropped $2.49 per share to close at $6.30 per share on June 10, 2008, a one-day decline of 28% on extremely high volume, resulting in damage to Class members who had purchased at prices inflated by defendants' materially false and misleading statements.
The Pomerantz Firm, an established law firm for over 70 years, has offices in New York, Chicago, Washington, D.C., Columbus, Ohio and the San Francisco Bay area. The firm specializes in representing victims of securities fraud, breaches of fiduciary duty, and corporate misconduct.
More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca/